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Mutual

Funds
Analysis

Statistical analysis of
Mutual funds on the basis
of risk and return

VIVEK A ACHARYA
ICFAI BUSINESS SCHOOL
STATISTICAL ANALYSIS

PROJECT REPORT
ON

STASTISTICAL ANALYSIS OF
MUTUAL FUNDS ON THE
BASIS OF RISK AND RETURN

AT

BY
VIVEK ACHARYA
IBS KOLKATA

(07BS4671)

A Report submitted in the partial fulfillment


0f the requirements of MBA program

Submitted to:

Faculty Guide: Company Guide:


DR KAVI TA SH ASTRI Mr . Ritesh Kumarr
IBS, Kolk ata Assitant Manager - Tata AMC

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STATISTICAL ANALYSIS

ACKNOWLEDGEMENT

Before I get into thick of the things, I would like to add a few words for the people who were part
of this project in numerous ways. People who gave unending support right from the stage the project idea
was conceived.
I am deeply grateful to my Organizational guide Mr. Ritesh Kumar (Assistant Manager,

ACKNOWLEDGEMENT
Kolkata) & Mr. Manoj Garg (Vice President, East India) as they remained a constant source of

ABSTRACT
encouragement & provided professional competent advice during the whole work & my stay in the
company. Their helping hand, constructive attitude, & dynamic approach helped me in shaping this
project.

Finally, I express my gratefulness to Dr. Kavita Shastri (Faculty & my project guide) & Prof.
Subhashish Chakroberty (SIP Coordinator) for lending me the valuable guidance & wholehearted co-
operation which enhanced my practical & theoretical skills.

I am highly indebted to all the Relationship managers and Investment Advisors who were a part
of my survey, helped in my endeavor and spurred me to achieve something worthwhile and enduring. I
would also like to thank the staffs and officials of Tata Mutual Fund for their co-operation in providing us
with all the information, which were required by us.

The success of this project is because of the cooperation of all. I take no credit for this
achievement but take the responsibility of any mistakes and inaccuracies.

VIVEK ACHARYA

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CONTENTS
1. PROJECT TITLE 1
2. ACKNOWLEDGWMENT 2
3. CONTENT 3
4. ABSTRACT 4
5. CONCEPT OF MUTUAL FUND 5
a. ORIGIN OF MUTUAL FUND 6
b. ABOUT MUTUAL FUNDS 7
c. ADVANTAGES OF MUTUAL FUNDS 8

CONTENTS
d. TYPES OF MUTUAL FUND SCHEMES 10
6. COMPANY OVERVIEW 12
7. MUTUAL FUNDS INDUSTRY IN INDIA 15
8. STATISTICAL TOOLS 18
9. INFRASTRUCTURE MUTUAL FUND 23
a. MARKET CAPITALISATION 27
b. MEAN & STANDARD DEVIATION 28
c. ANALYSIS WITH STATISTICAL TOOLS 29
d. PORTFOLIO ANALYSIS 30
e. COMPARISION WITH THE BENCHMARK INDEX 33
10. EQUITY MUTUAL FUNDS 35
a. MARKET CAPITALISATION 40
b. MEAN & STANDARD DEVIATION 41
c. ANALYSIS WITH STATISTICAL TOOLS 42
d. PORTFOLIO ANALYSIS 44
e. COMPARISION WITH THE BENCHMARK INDEX 46
11. DEBT MUTUAL FUND 47
a. TOTAL FUND SIZE 51
b. MEAN & STANDARD DEVIATION 52
c. ANALYSIS WITH STATISTICAL TOOLS 53
d. PORTFOLIO ANALYSIS 55
e. COMPARISION WITH THE BENCHMARK INDEX 56
12. RECOMONDATION 59
13. APPENDIX 60
14. REFERENCE 63

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ABSTRACT

This project offers a valuable opportunity to take a glimpse of the mutual fund in
India. In today’s increasingly competitive and complex world there are large
numbers of mutual funds claiming to provide maximum return with minimum risk.
It is become very difficult to select the best mutual fund. There are more than

ABSTRACT
1000 schemes available for the investors in India. It is very difficult to select a
particular scheme on the basis of their past records.

This project will try to analyse few popular mutual funds statistically on the basis of
the risk involved in each fund and the return of the same. Also an in-depth analysis
of their portfolio will be done which will give a better view for a fund’s resultant
performance.

This project identifies the key factors that is making a fund perform better then is
competitor. The factors identified in this study will help fund manager design their
fund’s portfolio and provide optimum return to its investors. Also the said project
will be used by Tata Asset Management Company in the Eastern Zone to train its
Relationship Managers in helping them giving an in-depth view about their fund.

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STATISTICAL ANALYSIS

CONCEPT

A Mutual Fund is a trust that pools the savings of a number of investors who share
a common financial goal. The money thus collected is then invested in capital
market instruments such as shares, debentures and other securities. The income
earned through these investments and the capital appreciations realized are shared

CONCEPT
by its unit holders in proportion to the number of units owned by them. Thus a
Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at
a relatively low cost. The flow chart below describes
describes broadly the working of a
mutual fund:

Mutual Fund gets their earnings in two ways:-


ways:
1. First is the most organic way, which is the dividend they get on the
securities they hold.
2. If the fund sells securities that have increased in price, the fund has a
capital gain. This is reflected in NAV of each unit.
3. Third is by the redemption of their units by investors will be at
discount to the current NAV[net asset value]

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ORIGIN OF MUTUAL FUND

When three Boston securities executives pooled their money together in 1924 to
create the first mutual fund, they had no idea how popular mutual funds would

ORIGIN OF MUTUAL FUND


become.

The idea of pooling money together for investing purposes started in Europe in the
mid-1800s. The first pooled fund in the U.S. was created in 1893 for the faculty and
staff of Harvard University. On March 21st, 1924 the first official mutual fund was
born. It was called the Massachusetts Investors Trust.

After one year, the Massachusetts Investors Trust grew from $50,000 in assets in
1924 to $392,000 in assets (with around 200 shareholders). In contrast, there are
over 10,000 mutual funds in the U.S. today totaling around $7 trillion (with
approximately 83 million individual investors) according to the Investment
Company Institute.

The stock market crash of 1929 slowed the growth of mutual funds. In response to
the stock market crash, Congress passed the Securities Act of 1933 and the
Securities Exchange Act of 1934. These laws require that a fund be registered with
the SEC and provide prospective investors with a prospectus. The SEC (U.S.
Securities and Exchange Commission) helped create the Investment Company Act
of 1940 which provides the guidelines that all funds must comply with today.

With renewed confidence in the stock market, mutual funds began to blossom. By
the end of the 1960s there were around 270 funds with $48 billion in assets.

In 1976, John C. Bogle opened the first retail index fund called the First Index
Investment Trust. It is now called the Vanguard 500 Index fund and in November of
2000 it became the largest mutual fund ever with $100 billion in assets.

One of the largest contributors of mutual fund growth was Individual Retirement
Account (IRA) provisions made in 1981, allowing individuals (including those
already in corporate pension plans) to contribute $2,000 a year. Mutual funds are
now popular in employer-sponsored defined contribution retirement plans (401k),
IRAs and Roth IRAs.

Mutual funds are very popular today, known for ease-of-use, liquidity, and unique
diversification capabilities.

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STATISTICAL ANALYSIS

ABOUT MUTUAL FUNDS


What Is a Mutual Fund?
A mutual fund is a company that invests in a diversified portfolio of securities.
People who buy shares of a mutual fund are its owners or shareholders. Their
investments provide the money for a mutual fund to buy securities such as stocks

ABOUT MUTUAL FUNDS


and bonds. A mutual fund can make money from its securities in two ways: a
security can pay dividends or interest to the fund or a security can rise in value. A
fund can also lose money and drop in value.
Different Funds, Different Features
There are three basic types of mutual funds—stock (also called equity), bond, and
money market. Stock mutual funds invest primarily in shares of stock issued by
Indian or foreign companies. Bond mutual funds invest primarily in bonds.
Money market mutual funds invest mainly in short-term securities issued.

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ADVANTAGES OF MUTUAL FUNDS

Why Invest in a Mutual Fund?

ADVANTAGES OF MUTUAL FUNDS


Mutual funds make saving and investing simple, accessible, and affordable. The
advantages of mutual funds include professional management, diversification,
variety, liquidity, affordability, convenience, and ease of recordkeeping—as well as
strict government regulation and full disclosure.

Professional Management: Even under the best of market conditions, it takes an


astute, experienced investor to choose investments correctly, and a further
commitment of time to continually monitor those investments.
With mutual funds, experienced professionals manage a portfolio of securities for
you full-time, and decide which securities to buy and sell based on extensive
research. A fund is usually managed by an individual or a team choosing
investments that best match the fund’s objectives. As economic conditions change,
the managers often adjust the mix of the fund’s investments to ensure it continues
to meet the fund’s objectives.

Diversification: Successful investors know that diversifying their investments can


help reduce the adverse impact of a single investment. Mutual funds introduce
diversification to your investment portfolio automatically by holding a wide variety
of securities. Moreover, since you pool your assets with those of other investors, a
mutual fund allows you to obtain a more diversified portfolio than you would
probably be able to comfortably manage on your own—and at a fraction of the cost.
In short, funds allow you the opportunity to invest in many markets and sectors.
That’s the key benefit of diversification.

Variety: Within the broad categories of stock, bond, and money market funds, you
can choose among a variety of investment approaches. Today there are more then
1000 types of mutual fund available for the Indian investors.

Low Costs: Mutual funds usually hold dozens or even hundreds of securities like
stocks and bonds. The primary way you pay for this service is through a fee that is
based on the total value of your account. Because the fund industry consists of
hundreds of competing firms and thousands of funds, the actual level of fees can
vary. But for most investors, mutual funds provide professional management and
diversification at a fraction of the cost of making such investments independently.

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Liquidity: Liquidity is the ability to readily access your money in an investment.


Mutual fund shares are liquid investments that can be sold on any business day.
Mutual funds are required by law to buy, or redeem, shares each business day. The
price per share at which you can redeem shares is known as the fund’s net asset
value (NAV). NAV is the current market value of all the fund’s assets, minus

ADVANTAGES OF MUTUAL FUNDS


liabilities, divided by the total number of outstanding shares.

Convenience: You can purchase or sell fund shares directly from a fund or through
a broker, financial planner, bank or insurance agent, by mail, over the telephone,
and increasingly by personal computer. You can also arrange for automatic
reinvestment or periodic distribution of the dividends and capital gains paid by the
fund. Funds may offer a wide variety of other services, including monthly or
quarterly account statements, tax information, and 24-hour phone and computer
access to fund and account information.

Protecting Investors: Not only are mutual funds subject to compliance with their
self-imposed restrictions and limitations, they are also highly regulated by the
federal government through the U.S.
Securities and Exchange Commission (SEC). As part of this government regulation,
all funds must meet certain operating standards, observe strict antifraud rules, and
disclose complete information to current and potential investors. These laws are
strictly enforced and designed to protect investors from fraud and abuse.
But these laws obviously cannot help you pick the fund that is right for you or
prevent a fund from losing money. You can still lose money by investing in a mutual
fund. A mutual fund is not guaranteed or insured by the FDIC or SIPC, even if fund
shares are purchased through a bank.

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TYPES OF MUTUAL FUNDS SCHEMES

Types of Mutual Fund Scheme

MUTUAL FUNDS SCHEMES


By Structure Other Schemes

Tax Saving Scheme Special Schemes

Open-ended Close ended Interval

By investment Objectives

Growth Schemes Income Schemes Balanced Schemes Money Market Schemes

BY STRUCTURE:

Open Ended Schemes: These do not have a fixed maturity. You deal directly with
the Mutual Fund for your investments and redemptions. The key feature is liquidity.
You can conveniently buy and sell your units at Net Asset Value related prices.

Close Ended Schemes: Schemes that have a stipulated maturity period (ranging
from 2 to 15 years) are called closed ended schemes. You can invest directly in the
scheme at time of the initial issue and thereafter you can buy and sell the units of
the scheme on the stock exchanges where they are listed. The market price of the
stock exchange could from the scheme’s NAV on account of demand and supply
situation, unit holders expectation and other market factors.

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Interval Schemes: These combine the features of open ended and closed ended
schemes. They may be traded at stock exchange or may be open for sale or
redemption during pre determined intervals at NAV related prices.

BY INVESTMENT OBJECTIVE:
Growth Schemes: Aim to provide capital appreciation over the medium to long

MUTUAL FUNDS SCHEMES


term. These schemes normally invest a majority of their funds n equities and are
willing to bear short term decline in value for possible future appreciation. These
schemes are not for investors seeking regular income or needing their money back
in the short term.
Income Schemes: aim to provide regular and steady income to investors. These
schemes generally invest in fixed income securities such as bonds and corporate
debentures. Capital appreciation in such schemes may be limited.
Balanced Schemes: Aim to provide both growth and income by periodically
distributing a part of the income and capital gains they earn. They invest both in
shares and fixed income securities in the proportion indicated in their offer
documents.
Money market Schemes: Aim to provide easy liquidity, preservation of capital
gains and moderate income. These schemes generally invest in safer, short term
instruments such as treasury bills, certificate of deposits, commercial papers etc.
Return on these schemes may fluctuate, depending upon the interest rates
prevailing in the market.

OTHER SCHEMES
Tax Saving Schemes: These schemes offer tax rebates to the investor under tax
law as prescribed from time to time. This is made possible because the government
offers tax incentives for investment in specified avenues.
For example Equity Linked Saving Schemes, and Pension Schemes.
Special Schemes: This category includes index schemes that attempt to replicate
the performance of a particular index such as BSE Sensex or the NSE or industry
specific schemes or sectoral schemes.
Index Fund Schemes: They are ideal for investors who are satisfied with a return
approximately equal to that of an index.
Sectoral Fund: These schemes are ideal for investors who have already decided to
invest in a particular sector or segment

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COMPANY OVERVIEW

Backed by one of the most trusted and valued brands in India, Tata Mutual Fund
has earned the trust of lakhs of investors with its consistent performance and
world-class service.

Tata Mutual Fund manages around Rs. 22,980.76 crores (as on March 31, 2008)
worth of assets across its varied offerings. Tata Mutual Fund offers an investment

COMPANY OVERVIEW
option for everyone, whether you are a businessman or salaried professional, a
retired person or housewife, an aggressive investor or a conservative capital
builder.

The Tata Asset Management (TAM) philosophy is centered on seeking consistent,


long-term results. Tata Asset Management aims at overall excellence, within the
framework of transparent and rigorous risk controls.

Areas of Business

A leading player in the mutual fund arena, TAM offers a wide array of product for
institutional and individual investors at various life stages across the risk- reward
spectrum. The company offers investment products under three main categories for
every financial need and under varied market conditions:

 Equity funds
 Balanced funds
 Debt funds

The core strength of TAM stems not only from its sound systems and processes but
also from the quality of its intellectual capital, which is made up of the best and
brightest minds. At the same time, the company provides a robust risk
management framework with inbuilt controls and balances.

The title of the project is “Investors Perception About Mutual Fund” This will
through light on how investors view our funds as a potential investment with
detailed perception. Quantify the results of our fund marketing strategy and
improve the quality of our investor communications with valuable investor
feedback.

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STATISTICAL ANALYSIS

Perception research provides you with actionable feedback from investors who have
considered investment in our funds. It surveyed up to 200 investors to learn how
they perceive the value of our funds and what factors influenced their investment
decision.

TATA Mutual fund constantly benchmark our efforts against these tenets of
performance:

COMPANY OVERVIEW
Consistency: It strive to deliver consistent results through our value-based
investing methodology, keeping alive the credo of the late doyen of the Tata Group,
Mr. J.R.D. Tata, that money received from the people should go back to them
several times over.

Flexibility: Tata Mutual Fund offers investors a broad range of managed


investment products in various asset classes and risk parameters, with operational
flexibility to suit their varied investment needs.

Stability: Their commitment to the highest quality of service and integrity is the
foundation upon which we build trust with our clients.

Service: They offer a wide range of services to assist investors have a fulfilling and
rewarding financial planning experience with us. We have designed our services
keeping in mind the needs of our investors, giving them a smooth and hassle-free
financial planning process.

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Core Values

The Tata Group has always sought to be a value-driven organization. These values
continue to direct the Group's growth and businesses. The five core Tata values
that underpin the way we do business are:

Integrity: We must conduct our business fairly, with honesty and transparency.
Everything we do must stand the test of public scrutiny.

COMPANY OVERVIEW
Understanding: We must be caring, show respect, compassion and humanity for
our colleagues and customers around the world, and always work for the benefit of
the communities we serve.

Excellence: We must constantly strive to achieve the highest possible standards in


our day-to-day work and in the quality of the goods and services we provide.

Unity: We must work cohesively with our colleagues across the Group and with our
customers and partners around the world, building strong relationships based on
tolerance, understanding and mutual cooperation.

Responsibility: We must continue to be responsible, sensitive to the countries,


communities and environments in which we work, always ensuring that what comes
from the people goes back to the people many times over.

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MUTUAL FUNDS INDUSRY IN INDIA

MUTUAL FUNDS INDUSTRY IN INDIA


The mutual fund industry in India started in 1963 with the formation of Unit Trust
of India, at the initiative of the Government of India and The Reserve Bank of India.
The history of mutual funds in India can be broadly
divided into four distinct phases

FIRST PHASE Unit Trust of India (UTI) was established on 1963 by an


Act of Parliament. It was set up by the Reserve Bank of
1964-87 India and functioned under the Regulatory and
administrative control of the Reserve Bank of India. In
1978 UTI was de-linked from the RBI and the Industrial
Development Bank of India (IDBI) took over the
regulatory and administrative control in place of RBI. The first scheme launched by
UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets
under management.

1987 marked the entry of non- UTI, public sector mutual funds set up by public
sector banks and Life Insurance Corporation of
India (LIC) and General Insurance Corporation of
India (GIC). SBI Mutual Fund was the first non- SECOND PHASE
UTI Mutual Fund established in June 1987 followed
by Canbank Mutual Fund (Dec 87), Punjab National
1987- 1993
Bank Mutual Fund (Aug 89), Indian Bank Mutual
Fund (Nov 89), Bank of India (Jun 90), Bank of
Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while
GIC had set up its mutual fund in December 1990.
At the end of 1993, the mutual fund industry had assets under management of
Rs.47,004 crores

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With the entry of private sector funds in 1993, a new era started in the Indian
mutual fund industry, giving the Indian investors a
wider choice of fund families. Also, 1993 was the year
THIRD PHASE in which the first Mutual Fund Regulations came into

MUTUAL FUNDS INDUSTRY IN INDIA


being, under which all mutual funds, except UTI were
1993-2003 to be registered and governed. The erstwhile Kothari
Pioneer (now merged with Franklin Templeton) was
the first private sector mutual fund registered in July
1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more


comprehensive and revised Mutual Fund Regulations in 1996. The industry now
functions under the SEBI (Mutual Fund) Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign mutual
funds setting up funds in India and also the industry has witnessed several mergers
and acquisitions. As at the end of January 2003, there were 33 mutual funds with
total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of
assets under management was way ahead of other mutual funds.

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was
bifurcated into two separate entities. One is the
Specified Undertaking of the Unit Trust of India with
assets under management of Rs.29,835 crores as at FORTH PHASE
the end of January 2003, representing broadly, the
assets of US 64 scheme, assured return and certain 2003 ONWARDS
other schemes. The Specified Undertaking of Unit
Trust of India, functioning under an administrator and
under the rules framed by Government of India and
does not come under the purview of the Mutual Fund Regulations.

The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is
registered with SEBI and functions under the Mutual Fund Regulations. With the
bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000
crores of assets under management and with the setting up of a UTI Mutual Fund,
conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking
place among different private sector funds, the mutual fund industry has entered its
current phase of consolidation and growth. As at the end of September, 2004, there
were 29 funds, which manage assets of Rs.153108 crores under 421 schemes.

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STATISTICAL ANALYSIS

GROWTH IN ASSET UNDER MANAGERMENT

MUTUAL FUNDS INDUSTRY IN INDIA


It can be seen that there is constant rise in the mutual fund’s asset under
management. For the past four years, the mutual fund industry is rising at the pace
of 33% each year. Looking at the current trend we can assume great boost in this
sector.

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STATISTICAL TOOLS

Statistical Tools

STATISTICAL TOOLS
Mean

An average of the sub-period


period returns, calculated by summing the sub-period
sub
returns and dividing by the number of sub-periods.
sub

This shows the average return earned by a fund over particular period of time. It is
a good comparative tool to assess different types of fund.

Standard Deviation

Standard deviation is a representation of the risk associated with a given security


(stocks, bonds, property, etc.), or the risk of a portfolio of securities. Risk is an
important factor in determining how to efficiently manage a portfolio of investments
because it determines the variation in returns on the asset and/or portfolio and
gives investors
ors a mathematical basis for investment decisions. The overall concept
of risk is that as it increases, the expected return on the asset will increase as a
result of the risk premium earned – in other words, investors should expect a
higher return on an investment
vestment when said investment carries a higher level of risk

where,
σ2 denoted standard deviation
is average return of a security,
N is number of period,
x is number actual return,

The larger the Standard Deviation in a period, the greater risk the security carries.

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STATISTICAL ANALYSIS

Beta

A measure of the volatility, or systematic risk, of a security or a portfolio in


comparison to the market as a whole. Also known as "beta coefficient".

STATISTICAL TOOLS
Where,
ra measures the rate of return of the asset,
rp measures the rate of return of the portfolio of which the asset is a part,
Cov(ra,rp) is the covariance between the rates of return.

Beta is calculated using regression analysis, and you can think of beta as the
tendency of a security's returns to respond to swings in the market. A beta of 1
indicates that the security's price will move with the market. A Beta less than 1
means, the security will be less volatile than the market. A beta of greater than 1
indicates that the security's price will be more volatile than the market. For
example, if a stock's beta is 1.2, it's theoretically 20% more volatile than the
market.

Many utilities stocks have a beta of less than 1. Conversely, most high-tech
Sensex-based stocks have a beta of greater than 1, offering the possibility of a
higher rate of return, but also posing more risk.

Sharpe Ratio

A ratio developed by Nobel laureate William F. Sharpe to measure risk-adjusted


performance. The Sharpe ratio is calculated by subtracting the risk-free rate - such
as that of the 10-year U.S. Treasury bond - from the rate of return for a portfolio
and dividing the result by the standard deviation of the portfolio returns.

R is return from the security


Rf is the Risk free return
σ= standard deviation

The Sharpe ratio tells us whether a portfolio's returns are due to smart investment
decisions or a result of excess risk. This measurement is very useful
because although one portfolio or fund can reap higher returns than its peers, it is

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STATISTICAL ANALYSIS

only a good investment


tment if those higher returns do not come with too much
additional risk. The greater a portfolio's Sharpe ratio, the better its risk-adjusted
risk
performance has been.
A variation of the Sharpe ratio is the Sortino ratio, which removes the effects of
upward price movements on standard deviation to measure only return against
downward price volatility.

STATISTICAL TOOLS
Sortino Ratio

A ratio developed by Frank A. Sortino to differentiate between good and bad


volatility in the Sharpe ratio. This differentiation of upwards and downwards
volatility allows the calculation to provide a risk-adjusted
risk adjusted measure of a security or
fund's performance without penalizing it for upward price changes. It it is calculated
as follows:

DR is downside risk,
R is portfolio Return
T is Target Return

The Sortino ratio is similar to the Sharpe ratio, except it uses downside deviation
for the denominator instead of standard deviation, the use of which doesn't
discriminate between up and down volatility.

P/E ratio

The P/E ratio (price-to-earnings


earnings ratio) of a stock (also called its "earnings
multiple", or simply "multiple", "P/E", or "PE") is a measure of the price paid for a
share relative to the annual income or profit earned by the firm per share. A higher
P/E ratio means
eans that investors are paying more for each unit of income. It is a
valuation ratio included in other financial ratios. The reciprocal of the P/E ratio is
known as the earnings yield.. [1]

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STATISTICAL ANALYSIS

The price per share (numerator) is the market price of a single share of the
stock. The earnings per share (denominator) is the net income of the
company for the most recent 12 month period, divided by number of shares
outstanding. The earnings per share (EPS) used can also be the "diluted
EPS" or the "comprehensive EPS". The P/E ratio can also be calculated by
dividing the company's market capitalization by its total annual earnings.

For example, if stock A is trading at $24 and the earnings per share for the most

STATISTICAL TOOLS
recent 12 month period is $3, then stock A has a P/E ratio of 24/3 or 8. Put another
way, the purchaser of stock A is paying $8 for every dollar of earnings. Companies
with losses (negative earnings) or no profit have an undefined P/E ratio (usually
shown as Not applicable or "N/A"); sometimes, however, a negative P/E ratio may
be shown.

By comparing price and earnings per share for a company, one can analyze the
market's stock valuation of a company and its shares relative to the income the
company is actually generating. Investors can use the P/E ratio to compare the
value of stocks: if one stock has a P/E twice that of another stock, all things being
equal (especially the earnings growth rate), it is a less attractive investment.
Companies are rarely equal, however, and comparisons between industries,
companies, and time periods may be misleading.

Treynor Ratio

A ratio developed by Jack Treynor that measures returns earned in excess of that
which could have been earned on a riskless investment per each unit of market
risk. The Treynor ratio is calculated as:

(Average Return of the Portfolio - Average Return of the Risk-Free Rate) / Beta of the
Portfolio

In other words, the Treynor ratio is a risk-adjusted measure of return based on


systematic risk. It is similar to the Sharpe ratio, with the difference being that the
Treynor ratio uses beta as the measurement of volatility.

Also known as the "reward-to-volatility ratio".

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STATISTICAL ANALYSIS

Fama

A factor model that expands on the capital asset pricing model (CAPM) by adding
size and value factors in addition to the market risk factor in CAPM. This model
considers the fact that value and small cap stocks outperform markets on a regular
basis. By including these two additional factors, the model adjusts for
the outperformance tendency, which is thought to make it a better tool for
evaluating manager performance.

STATISTICAL TOOLS
Here r is the portfolio's return rate, Rf is the risk-free return rate, and Km is the
return of the whole stock market. The "three factor" β is analogous to the classical
β but not equal to it, since there are now two additional factors to do some of the
work. SMB and HML stand for "small [Market Capitalization] minus big" and "high
[book-to-price ratio] minus low"; they measure the historic excess returns of small
caps over big caps and "value stocks" over "growth stocks".

Fama and French attempted to better measure market returns and, through
research, found that value stocks outperform growth stocks; similarly, small cap
stocks tend to outperform large cap stocks. As an evaluation tool, the performance
of portfolios with a large number of small cap or value stocks would be lower than
the CAPM result, as the three factor model adjusts downward for small cap and
value outperformance.

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STATISTICAL ANALYSIS

INFRASTRUCTURE MUTUAL FUNDS

An Infrastructure fund is a managed vehicle through which investors gain exposure

INFRASTRUCTURE MUTUAL FUNDS


to the underlying characteristics of infrastructure assets. Infrastructure is emerging
strongly as an asset class which can be particularly well suited to pension funds and
other investors with a long-term outlook. Infrastructure assets tend to display
comparatively stable, long-term real return and provide a good match for long-
dated liabilities.

They invest in private infrastructure companies, but the fnds themselves can be
listed or unlisted. For example, Macquarie has been investing in infrastructure for
more than a decade and now manages over 20 infrastructure funds around the
world. Half of these are listed on the stock exchange, with investors from pension
funds and other institutions to retail investors. The rest are unlisted funds in which
the investors are largely pension funds and other institutions.

The fund tens to either specialize in one class of infrastructure - for example invest
only in airport or only in toll-roads – or they invest across various infrastructure
sectors which meet specified investment criteria. For example

The infrastructure assets can include telecommunications and broadcast


infrastructure, utilities, toll road, airport and other transport infrastructure.
Fundamentally, infrastructure assets are distinguished by displaying the following
key characteristics:

 Provide essential community services


 Have strategic competitive advantage
 Have predictable long-term cash flow

These characteristics lead to the investment benefits outlined below.

Infrastructure assets display unique characteristic. Their essential and long-term


nature, combined with strong competitive position, lead to stable and predictable
consumer demand and cash generation. These assets tend to have a high fixed
capital base with comparatively low operating costs – on average of between 10%
and 30% of revenue. Along with the long-term operating license and predictable
demand, often in a regulated environment, this allows the manager to forecast
cashflows with accuracy.

Infrastructure assets have a low correlation to equity markets and other asset
classes. For the reason, it can provide valuable diversification in an investment

23
STATISTICAL ANALYSIS

portfolio. It also provides a good match for the long-dated liabilities of pension
funds due its long-life and inflation protected returns. This stability in operating
cashflows can reduce the overall volatility of returns for investors and, in our
experience; investors are finding this combination of sustainable yields, lower
volatility and inflation-linked return increasingly appealing.

INFRASTRUCTURE MUTUAL FUNDS


By investing in infrastructure through a specialized fund, investors not only gain
access to infrastructure as an asset class, but they benefit from the expertise that
the fund manager can bring to asset selection and management.

Infrastructure funds are part of a mutual fund category called thematic funds.

While sectoral funds invest in particular sectors like, say, information technology,
power, metals, oil and gas, etc, thematic funds invests in themes like
infrastructure, consumption-led categories like the retail industry and outsourcing
companies.

Today, there is a huge buzz about the Great Indian Gold Rush and its three themes
-- infrastructure, consumption and outsourcing.

Of these three, infrastructure funds have caught the fancy of a lot of mutual funds;
many new funds have been launched in this category in the last couple of years.

But there are only five that have a sizeable money under management; and these
four were launched before 2006:

These funds include:

1.DSP ML TIGER Fund

2. Prudential ICICI Infrastructure Fund

3. Tata Infrastructure Fund

4. UTI Thematic Infrastructure Fund

~ These are are open-ended funds; this means you can invest in them whenever
you like. We expect some more infrastructure funds to hit the market but most of
them would be close-ended (in open-ended funds, investors are free to sell their
units anytime; in close-ended funds, investors cannot sell their units for a minimum
period of time -- this minimum period is decided by the fund).

24
STATISTICAL ANALYSIS

~ Infrastructure, as a theme, covers several sectors like power utilities, power


equipment and construction companies.
companies. Unlike technology sector mutual funds (at
best, technology sector funds could buy stocks from telecom and media besides the
software stocks it traditionally invests in), infrastructure funds are not restricted to
a few sectors.

INFRASTRUCTURE MUTUAL FUNDS


DSP Merllynch Tiger Fund

Here's a fund suitable for all types of investors. The aggressive ones will like the
returns it offers while the conservative ones will find peace in its
diversification.

DSP T.I.G.E.R. Fund was launched at a very opportune time


when the Sensex was around 7,500 and the India economy had
begun to witness high growth.
growth. DSP India T.I.G.E.R
T.I.G.E Fund was
launched in April 2004. In the past four years DSP India has performed excellent
and has become one of the best funds for the investor. DSP T.I.G.E.R. Fund is an
open ended fund which can be purchase or sold anytime when the market is open.
Its Market capitalization as at 31/03/08 was 19,005.59 cr. Its

The broad investment mandate, large-cap


large cap tilt and intense diversification should
alleviate all their fears. An acronym
acronym for The Infrastructure Growth and Economic
Reforms, the fund focuses on sectors that are likely to prosper from growth related
to economic reforms and infrastructure development. With this as a starting point,
the fund manager follows a top-down
top approach h (for sector selection) before
resorting to bottom-up up stock picking. Unlike other infrastructure offerings, its
broader mandate has enabled it to tap into sectors that core infrastructure funds do
not - healthcare, FMCG, textiles, consumer non-durables.
non

ICICI Prudential Infrastructure Fund

ICICI Prudential Infrastructure has protected the


downside well while growing at a fast pace. In fact the
fund emerged as the fourth best diversified equity fund
in 2006.

ICICI Prudential Infrastructure fund was launched in August 2005. It is an open


ended fund having market capitalization of Rs. 38,317.95 cr. as at 31/03/08.
31/03/08 Its
last 52 weeks highest NAV was 36.61, while 52 weeks lowest was 18.53.

25
STATISTICAL ANALYSIS

As infrastructure funds go, the fund is structured to exclude technology, FMCG and
pharmaceutical companies. But beyond this similarity, there exist discernible
characteristics in the fund's portfolio that set it apart from other infrastructure
based funds.

Tata Infrastructure Fund

Tata Infrastructure Fund is one of the best fund and highly rated fund. It has

INFRASTRUCTURE MUTUAL FUNDS


recently received as a best equity fund award by
CRISIL. It is considered as one of the best
infrastructure fund. TATA Infrastructure's astute
ability to spot sector trends has delivered
handsomely.

Tata Infrastructure Fund was launched in December


2004.. It is an open ended fund having market capitalization of Rs. 24,081.68 cr. as
at 31/03/08. Its last 52 weeks highest NAV was 45.515 and lowest was 23.1237.

The fund achieved this


s essentially on the back of a large-cap
large growth-oriented focus,
with some help from the mid caps. To some extent one can attribute this stellar
performance to the sector exposure that most infrastructure funds maintain. But
the real clincher had been the fund
fund manager's ability to spot sector trends which
has truly augmented the fund's returns.

UTI Thematic Infrastructure Fund

India’s infrastructure sector is expected to witness huge investments in the coming


years. To enable you to take advantage of this boom, UTI now launches the UTI
Infrastructure Advantage Fund. As a 3 year close ended
fund it focuses on investing in high growth infrastructure
sectors such as Airports, Banking, Construction,
Engineering, Energy, Mining, Ports and Power among
others. The category pioneer, UTI Infrastructure has
been going great guns. A runaway hit in 2005 and an
exemplary success in 2006 & 2007, the fund is on a roll with the future looks just
as promising. he first infrastructure fund to be launched, it was a classic example of
the early bird getting the worm. It found a spot in the top quartile of the category
in 2005, generating 57 per cent returns and outdoing the average peer by a margin

26
STATISTICAL ANALYSIS

of more than 10 per cent. In 2006, it leapt to the topmost slot with returns of 61.48
per cent

UTI Infrastructure fund was launched


launch in the year 2005. It is an open ended fund
having market capitalization of Rs. 24,247.71 cr. as at 31/03/08. Despite being a
thematic fund, it has a reasonably diversified portfolio of 40-45
40 45 stocks. Naturally,
capital goods, construction and energy dominate the portfolio, but this
infrastructure fund also has a significant exposure to metals and technology. This
one makes for a worthy and diversified
diversified selection if you want to bet on the capital
expenditure wave sweeping across the country.

MARKET CAPITALIZATION

Market Capitalization

MARKET CAPITALISATION
Rs. in Crores
50,000.00
45,000.00
40,000.00
35,000.00
30,000.00
25,000.00
20,000.00
15,000.00
10,000.00
5,000.00
0.00
DSP Merllynch Tiger ICICI Prudential Tata Infrastructure UTI Thematic
Fund Infrastructure Fund Fund Infrastructure Fund

Source: Value Research

The above graph shows that ICICI Prudential Infrastructure Fund has maximum
fund under management as s compared to other fund houses. It is followed by UTI
Infrastructure fund, Tata Mutual Fund and DSP Merllynch Tiger Fund respectively.

27
STATISTICAL ANALYSIS

MEAN & STANDARD DEVIATION OF THE FUNDS


Calculated value of Mean and Standard Deviation of each types of Infrastructure
fund is shown in the chart below:

MEAN & STANDARD DEVIATION


50
43.88 42.74 43.24
45 41.72
40
35 Mean
28.68 28.7 29.29 30.26
30 Standard Deviation
25
20
15
10
5
0
DSP Merllynch ICICI Prudential Tata Infrastructure UTI Thematic
Tiger Fund Infrastructure Fund Infrastructure
Fund Fund

Source: Value Research

Mean Calculated above is for the period of past one year. We can see that there is
not much difference between the returns of these mutual funds. DSP Merllynch
T.I.G.E.R fund has provided maximum return of 43.88%,
4 which
ich means that it has
been most successful fund for the past year.

DSP Merllynch T.I.G.E.R fund also has the lowest standard deviation. It means that
it is the least volatile fund of the
th above mentioned fund. So, for both high risk
earner and comparatively low risk earner,
earner DSP Tiger fund is better option as it gives
highest return with least volatility.

28
STATISTICAL ANALYSIS

ANALYSIS WITH STATISTICAL TOOLS

ANALYSIS WITH STATISTICAL TOOLS


Funds Beta Sharpe Treynor Sortino Expense
Ratio Ratio Ratio Ratio

DSP Merllynch 0.97 0.32 1.20 0.51 1.91%


TIGER Fund

ICICI Prudential 0.93 0.36 1.38 0.58 1.82%


Infrastructure
Fund

Tata 1.01 0.31 1.19 0.50 1.95%


Infrastructure
Fund

UTI 1.04 0.30 1.10 0.48 2.03%


Infrastructure
Fund

Source: www.mutualfundsindia.com

If Beta less than 1 means, the security will be less volatile than the market. A beta
of greater than 1 indicates that the security's price will be more volatile than the
market. As seen from the above table UTI Infrastructure Fund is most volatile
followed by Tata, DSP and ICICI Prudential respectively. Now if market rise, UTI
Infrastructure Fund will rise at faster rate than other fund, but if market falls, UTI
Infrastructure Fund will fall at faster rate too.

The Sharpe ratio tells us whether a portfolio's returns are due to smart investment
decisions or a result of excess risk. The greater a portfolio's Sharpe ratio, the better
its risk-adjusted performance has been. ICICI Prudential has highest of Sharpe
Ratio of 0.36, which explains that the portfolio of ICICI Prudential is better of all.

Treynor ratio is a risk-adjusted measure of return based on systematic risk. Greater


the value of Treynor Ratio, better is the fund. Here again ICICI Prudential
Infrastructure fund scores higher than other funds.

Expense Ratio allowed by SEBI is 2.5% of the total asset under management. All
the above funds mentioned are below the mentioned ratio. But UTI Infrastructure
fund is having maximum expense ratio of 2.03%. Here again ICICI Infrastructure

29
STATISTICAL ANALYSIS

fund has least expense


e ratio. The reason might be that it is well established fund
house and hence requires comparatively less expense in marketing expenditure.

PORTFOLIO ANALYSIS

25
DSP Merllynch TIGER Fund

PORTFOLIO ANALYSIS
ICICI Infrastructure Fund
20
Tata Infrastructure Fund

UTI Infrastructure Fund

15

10

Source: Value Research

Portfolio of the fund describes compositions of various industries equity shares.


Mutual funds have much diversified portfolio as per the requirement of the fund.
Infrastructure fund has majority of its portfolio in industries like Energy,
Engineering, Metal,al, Construction, and Technology Industries.

30
STATISTICAL ANALYSIS

We can see here that all fund houses is having maximum investment in Energy
Industries. The reason is that, energy sector is expected to boost with more private
players like Reliance and Adani entering the sector.

Critically examining the above portfolio, DSP is having is having a very high
investment in Financial Services Industries. Financial Services Industry especially
Banks have been largely hit by sub-prime crisis. It has result into a high liquidity

PORTFOLIO ANALYSIS
crisis. Banks like Citibank has closed its large number of branches in India. Citi-
financials has shut-down number of its operations. Also Banks like ICICI Bank Ltd,
Bank of Baroda and State Bank of India has disclosed its large exposure in sub-
prime crisis. DSP Tiger Fund and Tata Infrastructure Fund having large exposure in
financial sector are not expected to give higher return.

Also Metal Industry, especially steel industry is largely hit due to inflation and
export taxes levied by government of India. IT has reduced the profit margin of
steel industry and therefore affecting the earnings from sector.

DSP Fund is having investment is the sectors like health care and consumer
durables where no other fund’s investment is there. Also, ICICI Pru. Fund is having
investment in automobile industry where no other fund has its investment.

Tata Mutual Fund has about 21% of its Fund in the form of cash. Having high cash
ratio doesn’t help in providing higher return, as that percent of money in not
invested. But in the present market scenario where there in a large volatility in the
market fund manager might be waiting for the correct period to invest the money.
Other fund houses also have large amount of money not invested.

So looking at the above portfolio, ICICI Prudential Infrastructure Fund whose


investment is well diversified is expected to give higher return with less of risk.

31
STATISTICAL ANALYSIS

RECENT CHANCES IN THE PORTFOLIO

Fund What’s In?? What’s Out??

CHANGES IN PORTFOLIO
Tata Infrastructure Fund Bharti Airtel Ltd VSNL

Reliance Petroleum Ltd Siemens Ltd

Power Grid Corporation of Yes Bank


India Ltd
ICICI Prudential Oil and Gas Corporation Housing Development Finance
Infrastructure Fund Ltd Corporation Ltd
Gujarat Ambuja Cement Gas Authority of India Ltd
Ltd
Mahindra & Mahindra Ltd Aban Loyd Chiles Offshore Ltd

India Cement ltd UTI Bank Ltd

UTI Infrastructure Reliance Industries Reliance Energy


Infrastructure Ltd
HDFC Bank Ltd

DSP Merllynch T.IG.E.R. Reliance Industries Reliance Energy


Fund Infrastructure Ltd
Idea cellular Ltd

Source: www.mutualfundsindia.com

There has been quite rational move by all the fund houses in including and
excluding right firm in their portfolio. ICICI Prudential made a huge change in its
portfolio by introducing 4 new companies and withdrawing from 4 existing
companies. It invested into companies like ONGC, Gujarat Ambuja Cement ltd,
India Cement Ltd and Mahindra & Mahindra Ltd, all having huge market potential. It
let away with HDFC, GAIL which are at the moment hit by the market factors.

Both UTI & DSP Merllynch had similar changes this month with both buying the
share of Reliance Industries Infrastructure Ltd shares and selling Reliance Energy.
DSP Merllynch T.I.G.E.R Fund also purchased some shares in Idea Cellular Ltd. It is

32
STATISTICAL ANALYSIS

expected that Idea Cellular is expected to do well in the recent future; hence it
might be a good move.

Tata Infrastructure also did a positive move by investing into Bharti Airtel and
Reliance Petroleum which is expected to do well. Bharti Airtel is expected to merge
with MTN of South Africa. This merger is expected to benefit Bharti Airtel by giving
global markets. Hence it’ll help its shareholder.

COMPARISION WITH THE BENCHMARK INDEX

COMPARISION WITH THE BENCHMARK INDEX


Comparison with the Benchmark

The above shown graph describes the movement of the selected infrastructure
funds with the benchmark. Here the benchmark chosen in BSE Sensex. The data
selected for the above graph is for the past1 year.

33
STATISTICAL ANALYSIS

It can be seen that when the BSE Sensex was on the rise, all the funds were
performing extremely well. The return is well above 100%. It can be seen that Tata
Infrastructure Fund was performing extremely well till Dec 07. It had provided
maximum return as compared to other fund houses and was rated best fund of the

COMPARISION WITH THE BENCHMARK INDEX


year by CRISIL and ICRA.

But when Sensex crashed in the January ’08 we saw a steep fall in all the funds.
The fall was more the 100% to the Sensex. Thereafter, there was change in the
high performer with ICICI Infrastructure fund out performing other infrastructure
funds. It can be seen in the graph that ICICi Infrastructure performing best
followed by Tata Mutual Fund, UTI Infrastructure Fund and DSP Merllynch Fund.

34
STATISTICAL ANALYSIS

EQUITY FUNDS

The term Equity Investment refers to the buying and holding of stocks in the stock
market by individuals & companies, then expecting income from dividends and
capital gains when there is a rise in the stock value. It also refers to the

ABOUT EQUITY FUND


acquirement of ownership / equity participation in a start-up company or a private
company. When you invest in a start-up company, the investment is termed as
Venture Capital and is likely to be at a higher risk than the on-going concerns.

The Equity Funds, also known as Stock Fund, is a fund that invests in equities /
stocks. These funds are generally held in stock or cash unlike securities or bonds.
This may be done by means of a mutual fund or exchange traded fund. The main
objective of investing in an equity fund is to have long-term growth via capital
appreciation apart from dividends and interest as sources of revenue. Explicit equity
funds may have their focus on specific market sector and also include certain
amount of risk.

The Equity Funds are either via the mutual funds or by any other pooled investment
vehicle. These vehicles have their prices quoted, listed and publicized. The mutual
funds are generally under the management of renowned fund management firms.
Under these types of holdings, the investors can have diversified funds with the
help and services of skilled professionals known as fund managers. These fund
managers are in charge of these funds.

Each equity fund can be distinguished from the other. For example, a fund can be
growth specific or and another can value specific. These funds can be invested only
in securities from one or more countries. Fund managed by the fund managers are
actively managed and the Index Fund reflects the specific market indices.

Different types of Equity Funds are available based on the motive of investment.
For instance, if you need to investment in equities for growth, the Stock Funds are
best suited to you.

Need Income invest in Bond Funds

Need Safety of Principal amount invest in Government Bond Funds

Need Immediate Liquidity invest in Money Market Funds

35
STATISTICAL ANALYSIS

Need Tax Relief invest in Municipal Funds

Need Maximizing Current Income invest in Corporate Bond Funds

Type of Funds

Listed below are different types of Equity Funds:

ABOUT EQUITY FUND


1. Index Fund: - An index fund makes the investment in securities in order to
reflect the market index. It entails buying and selling of securities in such a way
that it replicates the composition of the selected index enabling it to track the
underlying index performance. These funds have lower investment returns than the
other funds, as the turnover of securities in these funds is bare minimum. This in
turn results in lower management costs. Though these funds provide low
investment returns, they offer the benefit of well-diversified funds.

2. Growth Fund: - The investments of Growth Fund are made in stock of


companies, which grow at a swift pace. The growth companies re-invest almost
their entire profit for R&D (Research and Development) rather than pay dividends.
The main objective of Growth Funds is to provide Capital Gains than the regular
income.

3. Value Fund: - The Value Fund invests in Value Stock. The companies that are
listed under the Value Stock are generally well established organizations that pay
dividends.

4. Sector Fund / Specialized Fund: - As the very name indicates, the Sector
Funds tack a specific sector of the market i.e., one area of the industry. These
funds invest a minimum of 25% of their asset in their area of expertise. These
funds offer high appreciation accompanies by a high level of risk factor. The best
examples of a sector fund are gold funds, technology funds, etc.

5. Income Fund: - The Income Fund lays major emphasis on the income rather
than the growth. The investments of these funds are made in stock of reputed
companies, paying regular dividends, like preferred stocks, utility stocks, etc. The
Option Income Funds invest in securities on which options can be written and one
earn premium from writing options. Capital gains can also be earned from trading
options at profit. These funds hunt for increasing the total return by adding income
generated by the options to appreciation on the securities held.

36
STATISTICAL ANALYSIS

6. Balance Fund: - The investment in balance funds is made in stocks for


appreciation and in the bonds for income. It maintains a balance by providing
regular income to the fund holder and also increases the capital amount.

7. Asset Allocation Fund: - The Asset Allocation Fund distributes the investments
between stocks, income bonds, money market instruments, cash, etc in order to
acquire stability. The fund managers swap over the share of holdings in each asset
category based on the performance of the group.

ABOUT EQUITY FUND


To identify the methods of best investment, analysis has to be done. Two types of
analysis can be done for the same Technical Analysis and Fundamental Analysis.
The technical analysis involves the study of stock market as a whole whereas the
fundamental analysis is based on a

collection of indicators, which provide vital information from price and volume
series. It involves in analyzing the constant information of the stock market with an
attempt to forecast future business and the financial developments.

Below listed are 4 equity funds, which have progressed well and have proved that
they will be relevant for some time to come, unless there is a fundamental change
in the way they are managed.

 HDFC Top 200 Fund


 Reliance Growth Fund
 SBI Magnum Contra Fund
 Tata P/E Equity Fund

HDFC Top 200 Fund

HDFC Top 200 is five-star rated fund by Value Research. It has given very good
returns in the past years. Its composition is considered to be very impressive. It
was launched way back in the year 1996. As on 30th April 08, its market
capitalization was 34,349 cr. It has been graded as below average risk and above
average return.

HDFC as a fund house has been progressing as a good pace but this fund has
performed exceptionally well and is expected to do well due to its appropriate
composition

37
STATISTICAL ANALYSIS

Reliance Growth Fund

Reliance Growth has not only emerged as the largest mid cap fund but is also the
largest equity diversified fund with AUM of over Rs 5,600 crore. The fund has been
able to generate investor interest due to its impressive performance by beating its
peers by an impressive margin for the past so many years. The fund was launched
in September 1996. After the 2001 dotcom crash, the fund made a smart comeback

ABOUT EQUITY FUND


in 2002 with a return of 55.75 per cent, the second-best among the 59 funds. Since
then it maintained a top quartile position for the next four calendar years.

In 2007, the fund's investors had a reason to cheer since the fund gave them a
high return of over 76 per cent in the year consequently taking the fund's rank to
25 among the 162 funds. While the fund's allocation to large-, mid- and small-caps
keep oscillating, during the past six months, the exposure to mid-cap stocks has
increased from 43 per cent to over 50 per cent. In the past, the fund followed a
strategy of buy-and-hold for some stocks, while in some it has gone for a quick
profit taking. It is well known for its smart moves. In February 2006, the fund
maintained highest exposure to technology and basic/engineering. Now energy and
financial services sectors command the highest exposure of the fund. Over the past
one year the fund has also pared its exposure to auto and basic/ engineering
sectors also.

SBI Magnum Contra Fund

When the goings great, the fund performs exceptionally and even when the goings
not so smooth, Magnum Contra still manages to save face. Magnum Contra has
consistently managed to stay ahead of the curve. The fund outperformed the
category in every quarter since 2003. It emerged as the second and third best fund
in 2004 and 2005 and was pretty impressive last year too. It has the third highest
risk adjusted return in its category, i.e. for every unit of risk undertaken, the fund
gives you more bang for your buck. When the market slips, it tends to fall much
less than the category average as well.

This fund was launched in July ’99. The scheme of the fund is open ended and can
be purchased and sold at any point of time. The fund has struck a fine balance
between riding on consensus sectors and taking contrarian bets. The end product is
a blended portfolio of growth and value stocks. While still holding on to its multi-cap
orientation, the portfolio has expanded from 31 odd scripts to 57.

38
STATISTICAL ANALYSIS

Tata P/E Equity Fund

The fund's mandate allows it to minimize the downside risk to a large extent, &
that's why the Tata Equity PE fund has performed well at most times. On the face
of it, the objective is straightforward - to scout for undervalued companies. But
what sets Tata Equity PE apart is the specific criterion that helps define
undervalued. It invests in stocks that have a trailing P/E ratio less than that of the

ABOUT EQUITY FUND


Sensex at the time of investment. So, for example, let's take the trailing P/E of the
Sensex at 22.67 (April 29, 2006). For an investment to be made on May 2, 2006,
the trailing P/E of the stock as on the previous trading day (April 29, 2006) would
be compared with the trailing P/E of the Sensex. On that day, the rolling P/E ratio
of Wipro was 36.7 and that of ONGC was 12.99. So ONGC could be included in the
portfolio, but not Wipro.

Launched in June 2004, this fund obviously had a tough time keeping up with its
growth-oriented peers. But in the longer run, it has paid off. Its year-to-date
performance (as on November 30, 2007) of 64.19 per cent puts it way ahead of the
category average (45.28 per cent), the Nifty (45.29 per cent) and the Sensex
(40.45 per cent). This could be the result of value stocks coming back in vogue. But
it also appears that stock picking paid off.

Early last year, the fund began stocking up on the ferrous metals sector. In April
2006, the fund had a 22.5 per cent allocation to metals while the category average
was just 8.33 per cent. When metal stocks were getting hammered, stocks like
TISCO and SAIL were picked up at attractive valuations. PSU banks like Bank of
Baroda and Indian Overseas Bank were also picked up last year. When the category
average to the financials sector was almost 9 per cent (October 2006), this fund
had a 15.27 per cent allocation to it. While it tends to take concentrated sector
bets, it does not take huge stock positions. Compared with some other schemes
from Tata Mutual Fund, this one has a slightly smaller, but nevertheless quite large,
portfolio of around 40 stocks. A good value fund for one's portfolio.

39
STATISTICAL ANALYSIS

Market Capitalisation

The following graph shows the average market capitalization of the above mentioned funds.

Capitalisation
FUND
Market Capitalization

ABOUT EQUITY
40000

34349
35000

Market
30000

25000 23171

20000

15000
10439
10000 8028

5000

0
HDFC Top 200 Fund Reliance Growth Fund SBI Magnum Contra Fund Tata P/E Equity Fund

HDFC Top 200 fund has the highest market capitalization as compared to other funds. Reliance being the oldest fund
has not been able to attract large number of investors. Tata P/E Equity fund has the lowest market capitalization. The
reason may be, it is the youngest fund of the lot launched in December 2004.

40
STATISTICAL ANALYSIS

Analysis through Mean & Standard Deviation

Let us view the Mean and Standard Deviation of these funds.

Mean & Standard Deviation


Standard Deviation
50 38.19 41.03 42.24 Mean
37.71
40

30 23.18 27.59
26.29 27.14
20

10

HDFC Top 200


Fund Reliance
Growth Fund SBI Magnum
Contra Fund Tata P/E Equity
Source: Value Research Fund

In the above show chart, we can see SBI Magnum Contra Fund out performing
other funds. It has given a average return of 42.24 in the past 1 year followed by
Reliance Growth Fund, HDFC Top 200 Fund and Tata P/E Equity Fund. Tata P/E has
lowest average mean of 37.71.

While calculating their standard deviation, we see HDFC Top 200 having least SD of
all. It means that HDFC is least volatile fund of the lot. The most volatile fund is
Reliance Growth Fund. Tata is also on the higher side with SD of 27.14.

So looking at the above chart, we can say that SBI Magnum is better fund as its
average return is highest and SD is low, though not lowest.

41
STATISTICAL ANALYSIS

Analysis through Statistical Tools

Analysis through statistical tools


Ratios HDFC Top 200 Reliance SBI Magnum Tata P/E Equity
Fund Growth Fund Contra Fund Fund

Beta 0.90 0.98 0.96 1.01

Sharpe Ratio 1.44 1.29 1.42 1.19

Treynor 0.97 1.41 1.18 1.28


Ratio

Sortino 0.42 0.58 0.48 0.52


Ratio

P/E Ratio 30.81 37.20 22.45 24.64

Expense 1.90 1.81 1.92 2.36


Ratio

Looking at the above given data, we have quite mixed reactions about these funds.

Beta of three funds is less than 1. It means that if market falls, there will
comparatively small fall in these funds, while if the market rises, there rise will also
be comparatively less. So we can say that these funds are less risky but will also

42
STATISTICAL ANALYSIS

give less return. Tata P/E equity fund is having beta of more than 1 i.e. 1.01, which
means 100% change in market will bring 101% change in the fund. So this is
comparatively more risky fund but is expected to give higher return. In the present
market scenario where it is very difficult to say if market would rise or fall, it is very
hard to say whether a fund should have Beta more than 1 or less than 1.

Analysis through statistical tools


Sharpe Ratio shows smart portfolio’s composition. HDFC Top 200 is having the
highest Sharpe Ratio of 1.44, followed by SBI Magnum Contra Fund, Reliance
Growth Fund and Tata P/E Equity Fund. Tata P/E is having the least at 1.19 which
refers this fund as high returns but with high risk.

Treynor Ratio measures returns earned in excess of that which could have been
earned on a riskless investment per each unit of market risk. Reliance Growth fund
out scores other funds in this ratio with Treynor Ratio equal to 1.41, followed by
Tata P/E Equity Fund at 1.28, SBI Magnum Contra Fund at 1.18 and HDFC Top 200
at 0.97.

The Sortino ratio measures the risk-adjusted return of an investment asset,


portfolio or strategy. The ratio is the actual rate of return in excess of the investor's
target rate of return, per unit of downside risk. Here again Reliance Growth is the
best performer with Sortiino Rotio of 0.58 followed by Tata P/E Equity Fund at 0.52,
SBI Magnum at 0.48 and again the last is HDFC Top 200 fund at 0.42.

The P/E ratio (price-to-earnings ratio) of a fund is a measure of the price paid for
a fund relative to the annual income or profit earned by the fund per unit. Investor
who opts to purchase a fund would prefer low P/E, while a seller would like to sell a
fund whose P/E is high. Among the above funds, investor would prefer to invest
into SBI Magnum and Tata P/E Fund as it has low P/E, i.e. it is not listed at a high
price. Reliance Growth and HDFC Top200 is listed at a high price and hence
expensive to purchase for an investor.

Expense incurred by Tata is very high at 2.36% of the fund. The reason might be
that it is comparatively new fund house and needs to incur some advertisement
expenses. Also the market capitalization of the fund is comparatively low, hence the
ratio might seem to be quite big as compared to other. Reliance Growth fund has
lowest expense ratio.

43
STATISTICAL ANALYSIS

Portfolio Analysis

Now let us have the portfolio analysis of these funds.

30
HDFC Top 200

Portfolio Analysis
SBI Magnum Contra
25
Reliance

Tata
20

15

10

Source: Value research

The above graph shows the portfolio of the selected fund. From the graph it can be
seen that Reliance Growth and SBI Magnum Contra Fund is spread throughout the
different sector.

Here HDFC Top 200 Fund is having around 20% exposure in the financial market.
Financial market is on the back side, with the sub-prime
sub prime crisis. For the past 3
months Indian financial market is on the back foot. Also their fourth quarter results
are not very impressive. So the return
return from the HDFC Top 200 fund and Tata P/E
Equity Fund is comparatively lower.

44
STATISTICAL ANALYSIS

Also the exposure of Tata P/E Equity fund is more than 27% in Metal and metal
product. The return from this fund largely depends upon this sector. If any
uncertainty hits this sector, the loss to this fund will be enormous.

We can also see that it is only HDFC Top 200 have invested in consumer durables.
While Reliance Growth Fund have invested in Textile sector.

It should also be noted that Reliance Growth Fund is having around 20% of the
fund in cash which is very large amount on which the fund is not earning any

Portfolio Analysis
return. It might be that the fund manager would be waiting for the right time to
invest in this volatile market. SBI Magnum is having very small portion of the fund
in cash so the return will be received on the entire fund, but at the time of bulk
return the fund manager might find problem.

Recent Change in the Portfolio

Funds Whats In??? Whats Out???

HDFC Top 200 -Punj Loyd Ltd No Change


Fund
-Jai Prakash Associates

Reliance Growth -Kotak Mahindra Bank Ltd -JSW Steel Limited


Fund

SBI Magnum -Apollo Tyres Ltd No Changes


Contra Fund

Tata P/E Equity No Change -Grasim Industries Ltd


Fund
- Oil & Natural Gas Corp. Ltd

We can see that from the previous portfolio there is not much difference in the
present portfolio.

Reliance Growth bought Kotak Mahendra Bank Ltd to its portfolio which is very
smart move. Though there are number of bank’s equity shares loosing grip in the
market but Kotak Mahendra has performed well in the last few months and the
results were also quite satisfying. It also took a rational step by selling off JSW
Steel Ltd, as steel industry is in huge pressure from the government on keeping the
price of the product low and also international rise in raw metal.

45
STATISTICAL ANALYSIS

Tata P/E Equity fund kept itself away from investing in the high volatile market but
it sold couple of its shares. One of which was ONGC, the stock which expert suggest
is not going to do well. So the move seems to be a rational one from the Tata Fund
House.

Comparison with the Benchmark Index

Comparison with the Benchmark Index


The above given diagram shows the movement of the each fund’s NAV with the
Benchmark. Here benchmark is BSE Sensex. The NAV of past 1 year is taken into
study. We see very less gap between the NAV of these funds during the first 5
months. For the next two months when the Sensex was at its peak, two funds
namely Tata P/E Equity Fundnd and Reliance Growth Fund outperformed other funds.
When the Sensex fall in the mid Jan, highest fall was in Reliance and Tata Equity
Fund, but still the remained above other funds. It can be seen that Tata P/E Equity
Fund outperforms the other fund throughout
throughout the period. At the end of the period,
Tata P/E was highest followed by Reliance Growth, HDFC Top 200 and SBI Magnum
Contra Fund.

46
STATISTICAL ANALYSIS

Debt Fund

An investment pool, such as a mutual fund or exchange-traded fund, in which core


holdings are fixed income investments. A debt fund may invest in short-term or
long-term bonds, securitized products, money market instruments or floating rate
debt. The fee ratios on debt funds are lower, on average, than equity funds

About Debt Fund


because the overall management costs are lower.

The main investing objectives of a debt fund will usually be preservation of capital
and generation of income. Performance against a benchmark is considered to be a
secondary consideration to absolute return when investing in a debt fund.

A debt fund has lots going for it as an investment. For most, it's the only way to
invest in income-generating instruments without having to commit huge sums of
money, or stressing out about assorted worries such as transaction costs, stamp
duty or lack of liquidity. In fact, many of the most attractive debt instruments are
unavailable directly to the retail investor.

Debt itself has the advantage of being much less risky than equities. Equities may
return more, but their volatility can be distressing. If steady, predictable returns
are what you expect, a debt fund will deliver precisely that. That's why it's an
essential portfolio component for people who take a keen interest in money
management, like 54-year-old housewife "Open-ended debt funds provide regular
income, liquidity and tax advantages minus the sleepless nights of equity." There's
also the tax-saving angle. Budget 99 made dividends tax-free in the hands of the
investor. Further, investors can claim indexation benefits, which have the effect of
reducing the tax liability on their capital gains arising from the sale or redemption
of units of debt funds.

Debt Fund in consideration.

 Birla Sun Life Income Fund


 HSBC Income Investment Fund
 Kotal Income Plus Fund
 Tata Income Fund

47
STATISTICAL ANALYSIS

Birla Sun Life Income Fund


This fund was launched on March 1997. It is the oldest fund of the selected lot. This
fund house is considered as the best fund house for the debt based fund. It has
been rated as Five Star Fund from the Value Research. The fund’s investment has
been largely diversified with investment in all highly rated funds. Its Asset Under
Management is more than Rs. 275 Cr.

About Debt Fund


It can be seen that the fund has always outperformed the benchmark when the
Debt Medium-term index is on the rise. Also when it falls, Birla Sun Life Income
Fund falls at greater pace.

HSBC Income Investment Fund


HSBC Income Investment Fund (HIF) seeks to generate regular returns by
investing in bonds, debentures, government securities and short term instruments
like commercial papers, repos etc. For a time horizon greater than a year and if one
seek regular returns, then one can invest in the Investment Plan of HSBC Income
Investment Fund.

48
STATISTICAL ANALYSIS

About Debt Fund


The fund has always outperformed the benchmark index.

Kotak Income Plus Fund


Kotak Income Plus invests 80% - 100% in debt and money market instruments and
0 - 20% in equity related instruments. The scheme endeavors to provide safety of a
debt fund with superior returns of equity product. To ensure safety of a debt fund
the scheme invests in top rated debt instruments thereby ensuring good credit
quality and liquidity. It was launched in the year 2003.

It can be seen that it has not always outperformed the benchmark index unlike
other funds.

49
STATISTICAL ANALYSIS

Tata Income Fund


Tata launched the fund way back in 1997. The objective of the scheme is to provide
income distribution and/ or medium to long term capital gains while at all times
emphasising the importance of safety and capital appreciation.

It is having its investment spread through only 14 debt funds.

About Debt Fund


Here we can see that the Fund has performed better then the benchmark Index,
but the performance is not as high as the other funds.

50
STATISTICAL ANALYSIS

Total Fund Size

Fund Size
in crores
275.45
300

Total Fund Size


250

200

150

100
29.95 34.69
24.54
50

0
Birla Sun Life HSBC Income Kotak Income Plus Tata Income Fund
Income Fund Investment Plan Fund

Source: Mutual Funds Insight

The above given figure shows the net asset of each fund as on 30th April 08.

It can be clearly seen that in type of fund that we have selected, Birla Sun Life
Income Fund leads others with its fund size of more than 250 crs. The fund was
launched 10 years ago and has been able to attract huge amount of investor in
their fund.

The oldest fund of all, HSBC Income Investment Fund has not been able to attract
and keep large number of investment. This might be the reason for its fund
fu size the
lowest of the lot.

Tata Mutual fund has also been launched 10 years ago and though its fund size is
very small as to Birla Sun Life Income fund it is doing better than other two funds.

51
STATISTICAL ANALYSIS

Analysis through Mean & Standard Deviation


Let us view the Mean and Standard Deviation of these funds.

10.73

Mean & Standard Deviation


12 Standard Deviation
10 Mean
7.3
6.82
8 6.44
6 5.63
4 2.98

2 1.77
1.87
0

Birla Sun Life


Income Fund HSBC Income
Investment Plan Kotak Income
Plus Fund Tata Income
Fund
Source: Value Research

We can see here that Birla Sun Life Income Fund has out-performed
out performed other fund in
the form of average return. It has provided return more than 10% while
wh others are
less than 8% of return. So we can say that Birla Fund house has performed
exceptionally well.

HSBC Income Investment Fund is giving second highest return at 7.3% while Kotak
and Tata fund houses follow them respectively.

While looking at the deviation from their mean, we find HSBC Income Investment
Plan is having lowest volatility at 1.77% followed by Tata Income Fund at 1.87,
Birla Sun Life Income Fund at 2.98 and Kotak Income Plus Fund at 5.63%. Kotak
Income Plus Fund is most volatile fund as its Standard Deviation is very high as
compared to other such schemes.

A rational investor will always prefer a fund giving high return with least standard
deviation. Also in debt fund, the investors are low risk takers and avoid investing
i in
the funds having Standard Deviation high. So for them Birla Sun Life Income Fund
will be considered as the optimal plan.

52
STATISTICAL ANALYSIS

Analysis through Statistical Tools

Now let us compare these funds on the basis of their statistical Ratios

Analysis through Statistical Tools


Ratios Birla Sun Life HSBC Kotal Income Tata Income
Income Fund Income Plus Fund Fund
Investment
Fund

Beta 1.05 1.07 1.07 1.09

Sharpe 0.39 0.15 0.27 0.15


Ratio

Treynor 0.12 0.04 0.18 0.03


Ratio

Sortino 0.76 0.27 0.43 0.24


Ratio

Expense 1.50 1.50 2.22 2.25


Ratio

Beta of all the fund is more than 1 which means if its benchmark quotes increase by
100% all the fund’s NAV will increase by more than 100%. The biggest change will
be in Tata Income Fund as its Beta is highest at 1.09. So if the benchmark will be
on the rise, Tata will rise at fastest rate of all other fund followed by HSBC and
Kotak fund with Birla being the last of the lot.

53
STATISTICAL ANALYSIS

Sharpe ratio concentrates on the composition of the fund. It calculates how smart
the fund is structured. Without a doubt, Birla Fund House tops the ratio followed by
Kotak Income Plus fund. Both HSBC Income Investment fund and Tata Income fund
are having lowest Sharpe Ratio.

Sortino Ratio calculated only downward movement of the fund with its benchmark.

Analysis through Statistical Tools


Higher the ratio better the fund is. Here again Birla Sun Life Income Fund Tops the
list with ratio of 0.76. Second place is taken by Kotak Income Fund followed by
HSBC and Tata Income Fund respectively.

Here again we see that Tata Income Fund is having highest expense ratio of 2.25 of
the total asset. It is having very high expense throughout its entire funds. Even
Kotak Income Plus Fund is also having very high expense. Both HSBC Income
Investment Fund and Birla Sun Life Income Fund is having lowest expense ratio of
the lot.

So reviewing the above table we can say Birla Sun Life Income Fund is the best of
the lot in almost all the ratios and hence most attractive fund.

54
STATISTICAL ANALYSIS

Porfolio Analysis

Let us study the composition of the selected


sel Funds

100

Birla Sun Life Income Fund


80
HSBC Income Investment Fund

Portfolio Analysis
Kotak Income Plus Fund
60
Tata Income Fund

40

20

0
AAA P1+ GOI Securities AA+ Cash & Money
Market
-20

A good mutual fund is that fund which is optimally distributed. Here we see HSBC
Income Investment Fund having more than 85% of the fund invested in the AAA
Rated Funds which may not be that much rational. Also its cash in hand is in
negative. It implies that it has taken money on credit to invest in the market.
m In
this case, if there is any large redemption from the investors, in that case the fund
manager might not be able to provide timely money to the investors.

Birla Sun Life Income Fund is having properly diversified portfolio with its
investment in allll high credit rated funds. We can see that its investment is less in
the GOL securities as in these securities risk is very less or we can say, there is no
risk but return is very less which does not help in earning more of a return. Its high
investment in n money market helps the fund in receiving more return from the
investment. So it is well balanced fund

Looking at the above graph we can see that Kotak Income Plus Fund is slightly
more risky as compared to other funds as it is having its investment in the th
companies with not the top level of Rating. It is also having investment in the

55
STATISTICAL ANALYSIS

companies with credit rating AA+ which makes it slightly more risky than other
funds. Also it is only Kotak which has invested in AA+ rated companies.

Tata Income fund is alsoo well diversified fund with its investment in all top credit
rated companies. It is having highest investment in GOI securities which makes this
fund least risky but also reduces the opportunity of earning more from other
companies.

Movement with the Benchmark


Ben

Crisil Composite Bond Fund Index


Birla Sun Life Income
HSBC Income Investment Fund
Kotak Income Plus Fund
Tata Income Fund

Source: www.mutualfundsindia.com NAV Graph


The above NAV graph has been drawn taken the NAV of the selected funds for the
period of past 1 year. The benchmark selected for the formulation for this graph is
CRISIL Composite Bond Fund Index.

It can be seen in the graph that Kotak Income Plus Fund has been most volatile
fund and has fluctuated a lot for
for the past one year. For the first three months its
growth was similar to other funds but in the month of September we saw a big fall
in the NAV of Kotak Income fund. This fall led to its NAV even below Benchmark.

56
STATISTICAL ANALYSIS

But thereafter for the next 4 months there was a big gain in its NAV. Its NAV was
highest for that period outperforming all other funds. But it again noticed a major
fall, ending the year with lowest NAV for the year. The reason for such volatility can
be its portfolio composition having AA+ rated bond funds.

As far as Birla Sun Life Income Fund is concerned, it has constantly provided high
return. It can be seen from the graph that when there is an increase in the
benchmark index, Birla Fund saw a greater rise, but there was not greater fall when
there was a fall in the Benchmark Index. This really makes fund most attractive and
desirable for the investors. It ended the year with staying on the top of the selected
fund. This is the reason it was accredited with five star rated fund from CRISIL.

HSBC Income Investment fund performed fairly well with always staying above the
benchmark Index. It has never fallen below the benchmark and this makes this

NAV Graph
fund second most preferred fund as there is least volatility and steady growth. It
ended the year with second highest NAV of the selected funds.

Tata Income Fund has not performed well. For the most of the period its NAV
stayed below the benchmark index. Though we don’t see much of the volatility in
the fund, which makes it less risky but investor do demand returns at least as that
of its benchmark if not more. But for 9 months its NAV was below CRISIL
Composite Bond Fund Index. At the end of the year, we saw some upward
movement in the NAV ending third of the selected funds.

57
STATISTICAL ANALYSIS

My Recommendation to Tata Mutual Fund

Tata Mutual Fund is comparatively a young company. It is having best of the


personals who can take Tata Mutual Funds to great heights. I have following
suggestion which I feel might help them in achieving their desire goals.

 Tata Mutual funds should diversify their investment throughout the

Recommendations
different sector and avoid keeping majority funds only in a particular sector.
 It should reduce its Expense Ratio which is very high as compared to other
fund houses
 Its changes in portfolio compared to previous are very rational but it should
also try to reduce its share in the financial sector which is at the downside.
 Tata Mutual Fund is not doing very good in the Debt Fund category. It
should try to reduce its share from the GOI securities and participate more
in the money market.

58
STATISTICAL ANALYSIS

APPENDIX I

CRISIL Rating Symbols For Long Term Ratings


Investment Grade Ratings
Instruments rated 'AAA' are judged to offer the highest degree of safety with regard
AAA
to timely payment of financial obligations. Any adverse changes in circumstances
(Triple A) Highest Safety
are most unlikely to affect the payments on the instrument

Instruments rated 'AA' are judged to offer a high degree of safety with regard to
AA
timely payment of financial obligations. They differ only marginally in safety from
(Double A) High Safety

Appendix
`AAA' issues.

Instruments rated 'A' are judged to offer an adequate degree of safety with regard to
A
timely payment of financial obligations. However, changes in circumstances can
Adequate Safety
adversely affect such issues more than those in the higher rating categories.

Instruments rated 'BBB' are judged to offer a moderate safety with regard to timely
BBB
payment of financial obligations for the present; however, changing circumstances
(Triple B) Moderate
are more likely to lead to a weakened capacity to pay interest and repay principal
Safety
than for instruments in higher rating categories.

CRISIL Rating Symbols For Short Term Instruments

This rating indicates that the degree of safety regarding timely payment on the
P-1
instrument is very strong.

This rating indicates that the degree of safety regarding timely payment on the
P-2 instrument is strong; however, the relative degree of safety is lower than that for
instruments rated 'P-1'.

This rating indicates that the degree of safety regarding timely payment on the
instrument is adequate; however, the instrument is more vulnerable to the adverse
P-3
effects of changing circumstances than an instrument rated in the two higher
categories.

This rating indicates that the degree of safety regarding timely payment on the
P-4 instrument is minimal and it is likely to be adversely affected by short-term adversity
or less favourable conditions.

This rating indicates that the instrument is expected to be in default on maturity or is


P-5
in default.

59
STATISTICAL ANALYSIS

Appendix II
Few of the Funds Provided By Tata Mutual Funds

Equity fund

 Tata Pure equity fund


 Equity opportunity fund
 Equity P/E fund
 Select equity fund
 Growth fund
 Index fund
 Life science & Tech fund
 Div Yield fund

Appendix
 Infrastructure Fund
 Mid Cap Fund
 Contra Fund

Debt Fund

 Tata Short Term Bond Fund


 Income Fund
 Gilt Securities Fund
 Gilt Short Maturity Fund
 Income plus Fund
 Liquid Fund
 Floating rate Fund- short run
 Floating rate fund- long run
 Floater Fund
 Liquidity Management fund
 Dynamic Bond Fund

Balance Scheme

 Tata Balanced Fund


 Young Citizens’ Fund

Monthly Income Scheme

 Tata Monthly Income Fund Scheme (Debt Fund)


 Tata MIP Plus Fund (Debt Fund)

60
STATISTICAL ANALYSIS

Appendix III

Top Ten Open Ended - Equity: Speciality - One Year Return

Return as
Fund NAV Returns (%) on

Reliance Diversified Power Sector Retail 66.27 68.96 5/15/2008

Taurus Libra Taxshield 28.46 56.03 5/15/2008

Appendix
DWS Investment Opportunity 36.29 54.62 5/15/2008

Reliance Regular Savings Equity 23.39 48.70 5/15/2008

ICICI Prudential Infrastructure Inst I 15.16 45.35 5/15/2008

DBS Chola Opportunities 41.76 45.05 5/15/2008

ICICI Prudential Infrastructure 28.57 44.15 5/15/2008

Taurus Discovery Stock 22.94 41.34 5/15/2008

Standard Chartered Premier Equity 21.30 41.06 5/15/2008

Canara Robeco Infrastructure 20.14 40.94 5/15/2008

61
STATISTICAL ANALYSIS

Top Ten Open Ended - Debt Fund: Monthly Income - One Year Return

Fund NAV Returns (%) Return as on

DBS Chola MIP 17.24 28.82 5/15/2008

Principal MIP Plus 15.20 17.78 5/15/2008

Principal MIP 17.69 15.38 5/15/2008

LICMF Floater MIP Plan A 14.78 14.59 5/15/2008

Birla Income Plus

Appendix
34.91 14.21 5/15/2008

LICMF MIP 27.86 14.08 5/15/2008

DWS MIP Plan A 14.32 13.92 5/15/2008

HSBC MIP Savings 15.35 13.61 5/15/2008

Birla Sun Life Income 29.71 12.90 5/15/2008

ING Income Inst 21.44 12.39 5/15/2008


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62
STATISTICAL ANALYSIS

References

 Khan & Jain


 www.mutualfundindia.com
 www.amfiindia.com
 www.tatamutualfund.com
 www.pruiciciamc.com
 www.principleindia.com
 www.bobmf.com
 www.jpmorganmf.com
 www.hdfcfund.com

References
 www.taurusmutualfund.com
 www.reliancemutual.com
 www.moneycontrol.com
 www.valueresearchonline.com
 www.investopedia.com
 www.wikipedia.com
 AMFI study material
 Mutual Fund Insight magazine
 Capital market magazine

63

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